Merchandise Inventory

Financial

$0-41$

E$-$F:$6-19$ Comparing amounts for cost of goods sold, ending inventory, and gross profit$-$FIFO and LIFO

Assume that the Thumbelina Specialty store purchased and sold a line of dolls during December as follows:

$\backslash$table$[[$Dec$.1,$Beginning merchandise inventory,$13$ units @$$11$ each$],[8,$Sale,$9$ units @ $$20$ each$],[14,$Purchase,$17$ units @$$13$ each$],[21,$Sale,$13$ units @$$20$ each$]]$

Requirements

Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the FIFO inventory costing method.

Compute the cost of goods sold, cost of ending merchandise inventory, and gross profit using the LIFO inventory costing method.

Which method results in a higher cost of goods sold?

Which method results in a higher cost of ending merchandise inventory?

Which method results in a higher gross profit?

Learning Objectives $2,3$

Ending Merch. Inv. $$96$